As predicted, environmental regulatory reform has been a top issue in the first month of the 2011 session. In the House of Representatives and Senate, leadership signaled their commitment to reform by ceremoniously designating their regulatory reform bills as House File 1 and Senate File 1. Not to be outdone, Governor Mark Dayton ended his third week as governor by issuing Executive Order 11-04, implementing most of the provisions in the House and Senate bills. The governor publicly instructed his MPCA and DNR Commissioners to “move at the speed of commerce by accelerating their environmental review and permitting processes.”

The House and Senate bills on regulatory reform and Governor Dayton’s Executive Order share several common provisions:

  • Setting a goal of making decisions on permit applications within 150 days of submitting a complete the application;
  • Setting goal of making decisions on permits within 30 days of completing an environmental impact statement;  
  • Allowing for electronic filing of both environmental review and permit applications;  
  • Conforming to federal Clean Water Act requirements by allowing the start of construction prior to receiving a wastewater discharge permit; and  
  • Requiring the Minnesota Pollution Control Agency to compare proposed air, water and hazardous waste standards to similar federal standards and standards in other Midwest states and to provide a justification for why any standards more stringent than federal standards are required to protect human health and the environment.  

The House and Senate bills contain two additional provisions. The Dayton administration testified at a hearing that the additional provisions are acceptable but require law changes, precluding the governor from implementing them through executive order. Those two provisions would streamline the environmental review process by:

  • Allowing project proposers to prepare a Draft Environment Impact Statement for a project requiring an EIS.  
  • Directing appeals of environmental review decisions to the Minnesota Court of Appeals, eliminating the current system that requires appeals to be first heard in District Court and allows appeals of District Court decisions to the Court of Appeals.  

The House of Representatives has passed House File 1 with mostly minor changes. The most significant change relates to a loan from the Iron Range Resources and Rehabilitation Board to a mining company to acquire land for a proposed project. Environmental groups challenged the loan, alleging that Minnesota environmental review rules prohibit approval of the loan until environmental review of the project is complete. The legislation would make clear that the loan is not impacted by environmental review rules.

The Senate has completed committee hearings on its bill and the full Senate will take action on the bill next week. All indications are the House and Senate will complete their work on the respective bills soon and send a final bill to Governor Dayton for his signature.

To the surprise of some (and the disappointment of a few) all of this activity is occurring in advance of a much anticipated report from the Office of the Legislative Auditor (“OLA”) on environmental review and permitting. The 2010 Legislature asked the OLA for information on the time and cost of environmental review and permitting. They also asked for information on differences between Minnesota and other states. The report is expected to be released as early as next week.